Video via https://www.youtube.com/watch?v=D-IZVlgnTFc

Description

"Alanna Krause of Enspiral tells the story of how Enspiral created a system for participatory budgeting, and a new internal economy between a community of 300+ entrepreneurs, creatives, freelancers and change-makers dedicated to working on "stuff that matters".

After working in the financial sector through the Global Financial Crisis of 2007/2008, Alanna left the sector and succeeded in helping create a model for a new economy that works for everyone."

The Transcipt

Alanna Krause:

"In 2008, the world around me was crumbling, and I didn’t even realise. I remember coming downstairs one morning in my flat in south London, and my flatmate , this guy from Australia who worked in banking, was just sitting at the kitchen table, staring at his half-buttered toast, with his glowing phone in his hand.

He said, “Northern Rock bank failed.”

I had no idea what that really meant. I didn’t understand that was, in many ways, the beginning of the financial crisis, which was going to unfold as everything crumbling around me. So I just left the house and got on the train to go to my own job in the financial sector, in the City of London.

I worked at a company that was a provider of high speed financial data to the whole global financial sector. Our office was just around the corner from the neoclassical buildings of the Bank of England and the London Stock Exchange, and from the huge steel and glass skyscrapers of the biggest banks in the word.

In the office, there were fish tanks everywhere, and neon light sculptures. It was basically like working in a nightclub, except everybody wore suits and wasn’t having as much fun.

I never expected to work in the financial sector. I was raised in California by hippies. My degrees were in art and Asian studies. I didn’t have an aspiration to work in finance. But they needed somebody who was fluent in Japanese and knew about computers, and that was me. I worked on the IT side of the systems.

I was kind of a weird fit for a corporate hierarchy. I had not really been a fit at my last job either, working as a civil servant for the government of Japan. In that job, I drove my boss crazy coming up with ideas for new initiatives. That is not what your middle management boss in local government wants to hear.

In this job, the same thing was happening. I was driving my boss crazy with new ideas. My boss was this guy named Paul. He was an overweight, middle-aged guy, a lumbering dude who would slump in his chair browsing Ebay all day long.

Paul was not interested in my ideas. Paul likes to keep things simple. Paul did not like change.

I felt like I had this little flame inside me — for wanting to make a difference, to care about what I was doing, to do something meaningful in my work.

I looked around me, saw that things could be better, and I wanted that to happen.

In that system, the only place for my ideas to go was to Paul, and that’s where ideas went to die. I think that little flame inside Paul had kind of gone out. I was surrounded by the system of the company. But it was like I couldn’t really touch it . I couldn’t change it or do anything with it.

We got a message that a VIP was going to come visit our floor. We were told to wear our best business clothes, and the fish tanks were all polished. It was the COO, the chief operations officer of the whole company, coming in from headquarters in New York.

He was wearing a sharp suit and had a toothpaste commercial smile. He really looked like a corporate executive. I was prepared to not like this guy, or at least to feel like he was literally from a different planet.

But then he started talking to our department, and as he spoke I realised this guy kind of understood me. He was on my wavelength.

His name was Ken. Ken really believed that the company was there to do something, and that we were all there to use the resources of the company to the best of our ability. The company went to lots of trouble and expense to hire smart people, and we weren’t supposed to be put in a box with nowhere to grow.

I resonated with that. So I wrote him an email.

“Hi Ken, I’m Alanna. You don’t know me, but I’ve got lots of ideas. And I think that lots of other people in this company do, too.”

He understood that way of thinking, but he just couldn’t hear us. He wasn’t connected to us.

He wrote me back: “Great! Let’s have a call.”

I logged off the phones to get on the conference call. Paul came over like, “What are you doing? Get back on the phones.” I said, “Oh no, it’s cool, I’m just having a conference call with the COO.”

A little bit of hierarchy hacking — what was he going to do?

Ken and I started working together. We created something called the Ideas Market. It was an internal system where employees could go and post up their ideas, and comment and vote on each other’s ideas. The top ideas would be picked up every month by management and implemented. That was cool. I was seeing that all these other people around me had their own little flames.

I was put on the management track and made a team leader. I started climbing the ladder. Meanwhile, things were crumbling around me in the system.

I would sit at this console with four screens, watching huge amounts of data flowing by in news tickers and graphs, and huge sums of money being moved from one place to another. It felt unreal, like the Matrix. It was all around me, but I could not touch it, and I didn’t really understand it.

I kept hearing about how things were all going wrong. When I went down the escalator, past the neon sculptures, and out the glass doors, there were people emerging from skyscrapers with cardboard boxes. They were being made redundant. It was getting a bit more real.

One day, I was walking back to the office after buying lunch, and suddenly there were a lot of people around me. I found myself in a big throng of people in the street, and I couldn’t keep going. I couldn’t get out. I realised there were barricades, and the police were surrounding us.

I had wandered into the G-20 protests in 2009. They were right outside my office. The police were using a technique called kettling. They surrounded 5000 people and wouldn’t let them out, and wouldn’t them have access to food and water, to basically shut down the protest.

Right near where I was standing, a 47 year old newspaper vendor named Ian Tomlinson was batoned by the police. He wasn’t even there to protest, but he was batoned by the police, and he died because they wouldn’t let him have medical attention. That was really real.

I think that sparked what had been a growing realisation: I was climbing this ladder, but I looked ahead of myself and I saw that no matter how far up it I climbed, there was nowhere up there I wanted to go.

At the end of the day, no matter how well I did my job or how much I improved things, ultimately what I was doing was moving numbers from one column to another column. It was meaningless.

At this company, when you quit you’re not allowed to talk to anybody or say goodbye. They have a policy that anyone who quits is never allowed to come work there again.

As the security guard was leading me by the elbow to the door, Paul came lumbering up to me. I raised my eyebrows, because he wasn’t supposed to talk to me. I was persona non grata at this point.

He said, “It’s too bad. We had high hopes for you.” I was surprised. I didn’t know he felt that way. But it was too late.

What I did next was in some ways utterly typical. I moved to Spain and enjoyed the sunshine. I went to Burning Man. I moved to India and I lived in an ashram and studied to be a yoga teacher. I learned a lot about myself.

I started volunteering at am NGO outside of Mysore that supports children rescued from human trafficking situations. That was meaningful work. Those were real people who needed real help, who I could have an impact on. I felt my flame brightening back up a little bit.

But after a while, I got an old familiar feeling.

I was helping these people that were immediately around me. But it felt like I was just moving numbers from one column to another, because I wasn’t touching the bigger system that was creating these problems in the first place.

I could only have an impact as big as myself. So I knew I needed to keep seeking.

I didn’t really know what I was looking for. I moved to New Zealand. I had no plan. I did not know what I wanted to do, or what I should do. I just started going to events in Wellington around stuff I was interested in, like sustainability, collaboration, and technology.

I kept seeing the same people there. After a while, I realised they all seemed to know each other. Eventually I figured out that this was Enspiral.

Enspiral at that time was really small. In 2011 it was just a group of computer programmers and designers who were drawn together by this idea that they wanted to use their professional skills and their working hours on this planet to make a positive difference. By collaborating and working together, they could have more resources and flexibility in order to do that.

I met Joshua, the founder, and got to know him. One day he took me out to lunch and said, “How much money to do you need? Can you start on Monday?” I started sitting next to him and working on Enspiral.

Enspiral, like many progressive organisations with aspirations to work collaboratively, really had the drive to be a collective. What was missing was a lot of the ‘how’, the real nitty-gritty of how you actually get together and work this way. That’s what I started to focus on.

The way it worked then is still true for the freelancer collective in Enspiral, called Enspiral Services. I’ll give you an example.

Last week I did a training for an NGO. Afterwards, I sent them an invoice. To them, it looks like a totally normal invoice (Enspiral Services Ltd, Alanna did training, $500). They pay into our bank account, as normal. From the outside, the bank account looks like any other business bank account (Enspiral Services Ltd, big pile of money). What’s going on inside is actually something quite different.

We use a system that we’ve developed in-house. This system doesn’t even have a name. I think that’s emblematic of how we hadn’t realised this thing is actually cool until very recently. It was just our admin system, so we called it “the backend” or by its URL, which is my.enspiral.

It allows us to take that bank account and virtualise it into hundreds of tiny accounts. They have money in them, and that money is pegged 1-to-1 to the money in the actual bank account.

When I get paid, $500 comes in and my.enspiral picks it up. It automatically takes some of it — the default amount is 20% — and puts it into ‘collective funds’, the money we use to build up the company and pursue the social mission.

And 80% comes to me — $400 out of that $500 goes in my Enspiral account. That money is 100% mine to control. I can log in, see how much money is in my account, and do anything I want with it.

For example, I can pay myself. I’m an employee of Enspiral Services Ltd, and I decide how much to pay myself. My income tax is taken out, etc. Or I can spend it on business expenses, like buying a laptop or going to a conference.

I get to decide. I don’t have to ask anyone’s permission. It’s like I’m the boss of my own business unit and that’s the budget.

Also, importantly, within the system I can send money to any of those hundreds of accounts, frictionlessly. It’s only when money leaves or enters the system that we have to worry about stuff like accounting or taxes (which we do — we pay our taxes and do our accounting). But inside, the money’s not actually going anywhere when we send it around.

So I can hire someone someone to do something for me at Enspiral, and just pay them into their Enspiral account instantly. That enables some really cool stuff.

What about that 20%, the $100 that went into the collective funds account? That’s where collaborative funding comes in, the process we use to make decisions about our collective resources.

Before we had collaborative funding, for practical reasons only a few people really understood the budget, had their heads around the numbers, or had access to the bank account.

We’d try to involve people in financial decisions making asking, “Should we spend money on this?”, or somebody else would say, “Can I spend money on this?” The answer was almost always, “I’m a designer, not an accountant. I don’t know. How much money do we even have? You decide.”

The effect was that a lot of power and information was centralising on just a few people. That’s not what we wanted. We wanted to do something different.

Like many progressive organisations, we had aspirations to work as a collective. But unlike some other organisations, we were ready to make it real, to start experimenting and putting our real money on the line. We were inspired by a processes we knew of for participatory budgeting that an intentional community used. Here’s how it worked.

If someone had an idea for how to spend the collective budget, they would literally put out a bucket. People would be given Monopoly money, and go around putting money in the buckets that they wanted to support. The results would be the budget.

We thought, why don’t we try to bring that online?

We started with a really ugly system of spreadsheets and forms. We’d put a call out for proposals for spending the budget, and people would put their proposals in. We’d stick those ideas across the top of a spreadsheet. Down the side would be the names of everyone who contributed that month to collective funds, and how much money they contributed. Everyone would come into this spreadsheet put put their dollars against the projects that they wanted to support.

This really changed the dynamic.

It wasn’t just a few people making financial decisions, but everyone, the crowd, making them together.

It meant that the 20% contribution to collective funds didn’t feel like a tax — it felt more like you were an investor, because you decided where it would go. If we wanted to take a risk on a project, everybody could invest in it together, and own the outcome together.

Critically, it helped us think more strategically about money, because it wasn’t just about advocating for the thing you wanted to get funded. You are invited to look at the whole landscape of the resources we have, and all the things we might want to do. If we say yes to this thing, we need to say no to that thing. We need to think strategically about what we’re trying to do here. That was transformative.

Enspiral began to scale up. It went from a bunch of individuals collaborating this way in one company to a network of companies.

It’s sort of like a fractal level up. Now we’ve got the Enspiral Foundation, which is a charitable company that sits in the middle and facilitates collaboration between the companies. The companies give financial contributions to the Enspiral Foundation, and they participate as companies in this bigger collaborative funding process. We’ve built an app for this process, called Cobudget. It’s visual and engaging. Doing the budget is almost gamified. It’s fun.

Enspiral has grown now, to about 300 people (we call them Contributors), across New Zealand and the world. Any one of them can come into Cobudget and propose an idea an idea for funding. Anyone can propose a bucket and say, “Please fill this up. I want to do this thing”.

To me, what that looks like is 300 little flames that can be fanned.

Now, because we’ve turned this into open source software, other groups are using it, too, to enable the same process.

It’s a pattern you see a lot at Enspiral: we hack on our own challenges around collaboration, and then we polish something up and open source it, so others can use it as well.

Recently, I was in Berlin at a conference called Capital for the Commons. It was about what the future of the economy could be. There were some really smart people there: academics who study this stuff, progressive economists, people who run public banks and credit unions, or invent crypto-currencies and stuff like that. I learned a lot at this conference. These people really understand how the economy works, and how it could be different.

The global economy is not something that has emerged from the laws of nature. We, human beings, have decided how it is. We made the rules, and it emerges from that. Because we invented it, we can change it.

I found that really inspiring. That’s why these people do this work.

But I also felt an underlying sense of frustration in this group of people, because they could see how it could be different so compellingly. They are immersed in this system, surrounded by it, but they can’t touch it, because convincing governments to change policy or taking out entrenched interests is really hard.

I was asked to present. I was a little bit nervous, thinking “What am I doing? I’m not an economist. What do I have to tell these people?” So I just showed them how money works at Enspiral, with my.enspiral and Cobudget. They were blown away. And I was blown away that they were blown away, because I did not realise what we’d done. My.enspiral is a bank. It’s a virtual bank where we do accounts, transactions, and enable overdrafts. We’ve taken the form of an LLC and used it to create a walled garden, a bubble within which we can make our own economy, where we get to set the rules. We don’t have to wait for the world out there to change for us to start living in the transition economy, right now.

The other night, I was sitting around my kitchen table with Doris, a lovely person, and an Enspiral contributor about a generation older than me. Doris is not a tech person. She’s an educator, a gardener, and a nurturer. Doris was telling me about a bread making workshop she was going to host, which she’d put it up on Enspiral’s internal peer-to-peer learning platform. She can charge a small amount for people to come to her bread making workshop. That’s an income source for her, the experience is a community-building exercise for everybody who comes to the workshop, and it’s also passing on this amazing skill (because Doris’s bread is delicious).

Also, a few dollars from every ticket to that workshop goes to the Enspiral Foundation, into Cobudget, under Doris’s name. She gets to go in there and decide what projects to fund with that money.

The software technology is really helpful. But some of the most exciting stuff is actually the legal and financial tools that we are building, and the way that we can set up companies.

How do you set up an employment contract so you are the boss of your own miniature business unit inside the collective? How do you do a shareholding structure for a post-capitalist company? These are the problems we’re working on, the ones I’m really excited to start open sourcing and sharing.

Doris was telling me that she’s really inspired in her work by what she can learn from nature: One of the most important principles is: go from practice to theory, not theory to practice.

The really resonated with me, because that has been my journey. I did not know that I was setting out to create an alternative economy. I just had a feeling. I just had this little flame inside me: I want to do stuff that matters, I want to care, and I think other people do, too.

I followed that feeling, found other people who felt that way, and, importantly, started putting things into practice. We made so many mistakes along the way. It wasn’t perfect. But we are doing it for real.

That is how we can create this little garden and plant this little seed — in the midst of a giant system we might not be able to touch or change — and grow a new economy for the future, right now." (https://medium.com/enspiral-tales/grow-your-own-economy-in-a-company-a88efc4ba0d#.yy00q4n36)

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Alanna Krause on Enspiral's Ethical Economy

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The Transcipt

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